Introduction to the TSI Indicator
Oscillators are useful indicators that present trend direction, momentum, as well as potential market reversals by plotting lines or bars that oscillate within a given range or around a midpoint.
The TSI Indicator is a modification of basic oscillator which plots an oscillator that is very responsive to price changes.
What is the TSI Indicator?
The TSI Indicator is a momentum oscillator which is a modified version of the True Strength Index (TSI) oscillator.
This oscillator plots a single line which oscillates around zero. The line it plots is characteristically very jagged, which is very different from the original True Strength Index.
This indicator is typically used to identify trends and trend reversals.
Trending markets can be identified based on whether the line is generally positive or negative. The TSI line is typically positive in an uptrend and negative on a downtrend.
It may also be useful for identifying overbought and oversold markets. However, overbought and oversold levels may vary depending on the market, as well as the settings used on the indicator.
It can also be used for identifying divergences and its potential trend reversals.
How the TSI Indicator Works?
The TSI Indicator has a very complex formula which is applied within its algorithm. Below is the series of formulas used for the standard TSI oscillator.
TSI = (PCDS/APCDS) x 100
PC = CCP – PCP
PCS = 25-period EMA of PC
PCDS = 13-period EMA of PCS
APC = AVCCP – PCP
APCS = 25-period EMA of APC
APCDS = 13-period EMA of APCS
PCDS = PC double smoothed
APCDS = Absolute PC double smoothed
PC = Price change
CCP = Current close price
PCP = Prior close price
PCS = PC smoothed
EMA = Exponential moving average
APC = Absolute PC
APCS = Absolute PC smoothed
This version of the TSI Indicator modifies the standard 25-period EMA and 13-period EMA used for the Absolute Price Change and Absolute Price Change Smoothed. Instead, it uses a preset of a 5-period EMA and 8-period EMA, which creates a more jagged oscillator line.
How to use the TSI Indicator for MT4
The TSI Indicator has a couple of modifiable variables within its indicator settings which would change the characteristics of its oscillator line.
“First_R” allows users to modify the number of periods used for its first underlying EMA value.
“Second_S” allows users to modify the number of periods used to its second underlying EMA value.
Buy Trade Setup
When to Enter?
Open a buy order on the confluence of a bullish divergence pattern and price action showing signs of a possible bullish reversal.
When to Exit?
Close the trade as soon as price shows signs of a possible bearish reversal.
Sell Trade Setup
When to Enter?
Open a sell order on the confluence of a bearish divergence pattern and price action showing signs of a possible bearish reversal.
When to Exit?
Close the trade as soon as price shows signs of a possible bullish reversal.
Divergence reversal trading is just one of the many ways the TSI Indicator can be used. As mentioned above, it can be used for mean reversals. However, traders should set their own marker levels to identify potential overbought and oversold reversals.
This indicator can also be modified to make it more similar to the standard TSI oscillator. This can be done by changing the number of periods it uses.
MT4 Indicators – Download Instructions
TSI Indicator for MT4 is a Metatrader 4 (MT4) indicator and the essence of this technical indicator is to transform the accumulated history data.
TSI Indicator for MT4 provides for an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.
Based on this information, traders can assume further price movement and adjust their strategy accordingly. Click here for MT4 Strategies
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How to install TSI Indicator for MT4.mq4?
- Download TSI Indicator for MT4.mq4
- Copy TSI Indicator for MT4.mq4 to your Metatrader Directory / experts / indicators /
- Start or restart your Metatrader 4 Client
- Select Chart and Timeframe where you want to test your MT4 indicators
- Search “Custom Indicators” in your Navigator mostly left in your Metatrader 4 Client
- Right click on TSI Indicator for MT4.mq4
- Attach to a chart
- Modify settings or press ok
- Indicator TSI Indicator for MT4.mq4 is available on your Chart
How to remove TSI Indicator for MT4.mq4 from your Metatrader Chart?
- Select the Chart where is the Indicator running in your Metatrader 4 Client
- Right click into the Chart
- “Indicators list”
- Select the Indicator and delete
TSI Indicator for MT4 (Free Download)
Click here below to download: